Impac Mortgage Holdings, Inc. (NYSE MKT: IMH), (the “Company”) today announced its Board of Directors has adopted a Tax Benefits Preservation Rights Agreement (the “Rights Agreement”) designed to preserve the value of its significant net operating loss carryforwards (“NOLs”) in relation to the potential limitations under Section 382 of the Internal Revenue Code. The Rights Agreement is effective today, but the Company intends to seek stockholder approval of the Rights Agreement at its 2014 annual meeting of stockholders, and if not so approved, the Rights Agreement will terminate at that time.

By adopting the Rights Agreement, the Board is helping to preserve the value of certain deferred tax benefits, including those generated by net operating losses (collectively, the “Tax Benefits”). In general, the Company may “carry forward” net operating losses in certain circumstances to offset current and future taxable income, which will reduce federal and state income tax liability, subject to certain requirements and restrictions.

The Company has federal NOLs totaling approximately $489 million as of December 31, 2012, although the related deferred tax asset was fully reserved for accounting purposes. Pursuant to U.S. federal income tax rules, the Company’s ability to use these Tax Benefits would be substantially limited and impaired if it were to experience an “ownership change” (as defined in Section 382 of the Internal Revenue Code). Generally, the Company will experience an “ownership change” if the percentage of the shares of common stock owned by one or more “five-percent shareholders” increases by more than 50 percentage points over the lowest percentage of shares of common stock owned by such stockholder at any time during the prior three years on a rolling basis. The Company noted that the Rights Agreement is designed to serve the interests of all stockholders by helping to protect the Company’s ability to use its NOLs to offset future tax liabilities and is similar to plans adopted by many other public companies with similar significant tax attributes.